INSTANT VIEW 4-U.S. service sector picks up in Sept-ISM

NEW YORK, Oct 3 (Reuters) - The pace of growth in the vast U.S. services sector picked up in September as new orders accelerated, though employment cooled, an industry report showed on Wednesday.

STORY: COMMENTS:

STEVEN WOOD, CHIEF ECONOMIST, INSIGHT ECONOMICS, DANVILLE, CALIFORNIA

"Business activity in the services, construction, and government sectors of the economy accelerated in September but these sectors are growing at only a moderate pace. Growth in Q3 was slightly better than it was in Q2. Continued growth in new orders and export orders provide some optimism for the economic outlook but weak order backlogs and inventories point towards continued moderate growth."

"It indicates a little bit of growth. This is good information ahead of the monthly employment report. It looks more like things are heading in the right direction. It is this new reality -- we don't have robust growth, we just have very moderate growth."

"It's in line with the factory report on Monday. We have seen a few reports now that seem to show things might have picked up in September, although it's not a strong improvement. Perhaps people are feeling better even though businesses are not. We have not broken out of the 1 to 2 percent growth range for this year."